In short, your insurance carrier could, in certain circumstances, take the entirety of your third-party personal injury settlement. However, your carrier’s rights to subrogate — the legal term for this type of recovery — are limited.
Perhaps the most important point is that the amount you win from a third party limits your carrier’s recovery. You would not end up owing your insurer money, at least not under normal circumstances in which you had entered a legitimate claim of benefits.
Furthermore, your insurance company could retrieve funds only from your net reward. That means that you would be able to pay your attorney and settle your court fees before the carrier could exercise subrogation rights.
To reiterate, this rule applies to third-party injury cases. The rule allows your insurance company to recover losses they incurred. However, since insurance companies are in the business of paying for other people’s losses, the rule only applies to issues for which a court later found a third party liable or over which that party settled out of court. For example, your insurer might recover medical expenses it paid for you if a dangerous tool caused you to suffer an injury at work and you later won an injury case against that tool’s manufacturer.
According to FindLaw, your insurer could also be responsible for paying some of the attorney’s fees and expenses in your third-party liability case in Texas. There are many exceptions to the subrogation rights of insurance carriers as well as to their payment responsibilities. Therefore, please do not regard this as specific advice for any legal matter. It is meant only as information.